179D tax deductions are available for energy-efficient buildings

Is your latest mid- or high-rise development leaving money on the table? If you haven’t investigated the 179D tax deduction requirements, chances are high.

Part of the Inflation Reduction Act, 179D encourages energy efficiency in commercial buildings and offers immediate benefits. The deduction ranges from $1.88-5.00 per square foot, depending on completion dates and energy-saving features – building components such as lighting, building envelope, and HVAC systems – installed.

Most California projects can meet the energy efficiency requirements through whole building energy modeling without changes to design. Eligible buildings include all commercial types, even those owned by non-profits. However, residential buildings over four stories as well as non-California projects can also qualify for 179D.

Updates to 179D effective January 2023 increased the deduction, expanded eligibility to include real estate investment trusts (REITs), and more.

To see if your building qualifies for this generous tax incentive opportunity, reach out to VCA Green today.

Moe Fakih, Principal
mfakih@vca-green.com

Robyn Vettraino, Principal
rvettraino@vca-green.com